Superannuation funds are heading for an eighth year of growth

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Median growth superannuation funds returned 8.5% for the first nine months of the financial year and are heading for an eighth year in a row of positive returns.

In the March quarter, the median growth fund, holding 61% to 80% in growth assets, was up 2.5%.

The previous two quarters were also positive, at 3.1% for the three months to September and 2.5% for December.

The March quarter return was driven mainly by strong share markets. Australian shares were up 4.7% while international shares gained 5.4%, a number dragged down by a stronger Australian dollar.

This chart from industry analysts Chant West compares performance since July 1992, the start of compulsory superannuation, against inflation.

Source: Chant West

“Growth funds have performed better than expected this financial year,” says Warren Chant of Chant West.

“With only the June quarter remaining, there’s a very good chance that they’ll deliver an eighth consecutive positive financial year return.”